I was planning to chastise the poster for not simply copying the original article's title and therefore misspelling "inequality", but then I followed the link and discovered that Reuters spelled it wrong too. What's the world coming to when professional journalists can't spell common words?
Reuters isn't what it used to be, since it got bought out by Thompson. It used to take the long view, now it's like any other corporation, all that matters are the quarterly figures. Why? Well the decline started when they broke with tradition and appointed a CEO who hadn't worked his way up through the ranks...
I'm baffled that Managerial work is lumped into High-Skill jobs...
Easily 80% of managers I've met/worked for have been decidedly low skill. Especially when compared with engineers, research scientists, programmers, designers, etc
I like making up statistics, too. 50% of the engineers I've met don't really do enough to earn their salary. How's that one?
Good management requires a vast amount of skill, whether that's technical or soft skills. Good managers keep you doing your work, and reduce your distractions without you even noticing.
Your statement should read, "Easily 80% of the managers I've met/worked for have been BAD". See the difference?
Is it 'making up statistics' when you give an opinion based on your own personal anecdotal evidence and say as much in the sentence? I understand your attempt to be provocative with your comment, but I don't see even what you said as making up a statistic, unless of course it is untrue in your experience and you literally just made it up.
Fair enough on the rewording but I'd hardly call management high-skill labor akin to the examples I mentioned.
I don't know. Managing takes as much skill as anything I have done in my career, but there is no good way of learning it than on the job IMHO. Not saying all managers are well skilled, but saying it is a low skill job is to me grossly misleading.
Fair enough, I could see that. I was mostly thinking of it in terms of learned skills, rather than human relations/leadership/politics skills, which I've always felt are more of a thing that people have, or do not have.
I probably shouldn't say its a low-skill or brainless job (in general... though I do often get that feeling from mangers), but I just personally never put it in the class of highly-skilled jobs.
Edit: I guess that I've always just placed it as more of a 'ladder climber' type of job than a highly skilled worker type of job. But to be totally fair that is likely due to my experiences. :)
Yeah, bad managers who mainly play the politics or think that management is what it is all about where the reasons I begun with starting startups. Now I don't have to work for them. :)
Source: former software engineer turned manager. Never had to juggle so many wildly different skills in my life.
I agree with 80% being shit though. That was my motivation to go there in the first place.
The thing is, just like CS doesn't teach people to be good developers, no amount of management training teaches people to be good managers.
Also, a good percentage of the coders are pretty shit too. The networking possibilities of the internet have allowed us to isolate ourselves from that, so good developers are usually amongst themselves, be it on places like HN, or working for companies they already know have high standards.
I bet outside of out bubble, the 80% shit applies to many other professions, including our own.
But that angry failed artist came to power by blaming the disastrous economic conditions on a) the victorious powers of WWI for imposing crippling penalties upon Germany, b) the existing government and their predecessors for accepting and adhering to these conditions, and c) certain groups within Germany for "exploiting" the situation.
Because income inequality causes all sorts of issues (haves/have nots, concentration of power, etc)
Regarding the difference between pre-WWI and Post-WWII income inequality it seems pretty disingenuous to claim (if you were) that the times (then and now) are similar in economic terms, not to mention quality of life. Between the 50s and 80s or so there was still great growth (for Americans at least) but much less income inequality. Some may argue that constituted a 'sweet spot' in terms of balancing growth with income inequality.
There is some interesting information at the below link regarding the time period following WWII
For my primer on this question, I look to The Moral Animal by Robert Wright, one of the first popular science books to introduce evolutionary psychology to a mainstream audience back in the 1990s.
To boil down a lot of interesting reading (on a subject, which it is fair to say, generates a lot of controversy): income inequality produces social instability, primarily as a result of a lot of economically (and, by extension, sexually) disenfranchised young men.
Given that instability is down in the US and young men are neither economically nor sexually disenfranchised, yet inequality is way up, it seems your theory is already falsified.
Are you certain that Black or insert minority males are not economically disenfranchised to a greater or lesser degree?
I'm not touching the sexual part with a 10 foot pole cause it bears no relevance in my opinion either. But I do think that many young men are economically disenfranchised in The States.
Edit: In my comment any mention of 'men' should read "and women". I don't mean just males which is another reason I don't think it is important to address the sexual disenfranchisement part.
I'm pretty sure that black males are less economically disenfranchised today than in the past, in spite of increases in inequality. For example, we no longer have Jim Crow laws attempting to correct the excesses of capitalism (greedy employers hiring blacks instead of whites).
A quick google search suggests black men are less sexually disenfranchized than non-blacks.
But are they still economically disenfranchised? The degree doesn't really matter much in terms of what the parent is saying to my thinking.
It also isn't necessarily true that the change in the level of disenfranchisement is due to growth, or change in anything having to do with the economy, so much as due to changes brought on by the civil rights movements. Things can change on a societal level without being impacted by or impacting directly things at an economic level.
The social instability mentioned in the parent is still going on even with these advances. Just saying 'its better than it was' doesn't make it not a thing.
> Given that instability is down in the US and young men are neither economically nor sexually disenfranchised
We are. That's a centerpiece to modern intersectional feminism: everyone's hurt to some degree by the structure of society. Men have it better in a lot of situations, but things are still rough.
The U.S. House of Representatives, driven by the GOP Tea Party faction, threatened to default on US debt payments last year. You didn't find that destabilizing?
Who is driving the Tea Party? I would contend economically disenfranchised (though, granted, not particularly young in a lot of cases) voters reacting to increasing economic polarization.
Do Tea Party rank-and-file see their grievances in those terms? Not when they're talking about guns rights and Obamacare perhaps. But get them talking about Wall Street and bank bailouts and it's a different story.
Regarding the debt ceiling, congress cannot threaten or cause default, since the executive branch has the power to prioritize debt payments. In any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
I seem to recall a pretty drastic race riot right around 1995 in LA. America is also still sounding the alarms about a rather large terrorist attack in 2001.
The parent didn't say that instability had increased, rather economic polarization had, but by what metric are you implying instability has decreased considering your above examples?
No major race riots or domestic terrorist incidents in the past 19 years? That seems like reduced instability to me. Crime down? Check. What else should I be looking at?
Klenwell said inequality is bad because it causes instability. That doesn't seem to be happening, so his theory seems to be wrong.
2001 was 19 years ago? I didn't know that. That attack is still being used as justification for all sorts of things as well some which are causing their own destabilizing effects. Also there have been other (arguably smaller) acts of domestic terrorism... The Boston Marathon bombing would be one example.
And to quote your prior post:
in any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
So by your example, things that happened in 1995 are 'more of the same' but when presented with a counter example in the same time span (and even more recently) it shows that things have changed (reduced instability) because it has been a significant period of time? Check. That makes sense.
I'm checking out of this conversation. The contortions in your logic are just a bit too much for me. Carry on.
I think Hitler was rather more cynical than that - when he wanted to exploit socialists to achieve his ends he supported socialism. However, after the Röhm purge (AKA "The Night of the Long Knives") most of the socialists within the party were removed (and often killed) - making the Nazis far more acceptable to the rich industrialists and military leaders that Hitler needed support from to get total power.
While what you say is true it does not change the fact that one of the main leverages used by Hitler was the economic inequality that the German public believed had been foisted upon them by the other European powers.
Regardless of how the Reich was built, or oriented politically, economic inequality (and nationalism) were a primary tool used to gain momentum.
You are totally correct that German leaders of business and holders of wealth were courted into the Reich. Many of them from Bayer to IG Farben benefited directly from the concentration camps.
Tell me, if the aristocracy and monied interests (directly enabled by vast income inequality) hadn't existed, would WW1 have happened?
If the economic suppression of Germany by the rest of Europe and the Great Depression hadn't happened (global income inequality, after a fashion), would WW2 have happened?
You are attempting to make assertions in high causal density situations; the evidence supports an infinite number of conclusions, and yours are not particularly convincing.
At that level you might as well argue that WWI was caused by agriculture, because without agriculture the war would not have happened. Any history without aristocracy or monied interests would be likewise completely unrecognizable. But neither social nor economic inequality plays any significant part in any credible narrative on the causes of the war that I've read. (And I've read many).
> I do not believe the world wars happened due to inequality - so no, I'm not worried.
Do you not believe the earth is more than 4,000 years old and that we evolved from other forms of life eons ago as well?
Some things are already established as fact; not everything is an opinion, not all opinions are valid, and the ones you've stated are just flat-out contradictory with actual real data.
Because excess income inequality is a symptom of larger societal problems. Much of the debate over inequality serves as a proxy for other issues such as classism, government/corporate relations, civic responsibility, and the future of the economy.
The amount of resources it takes to make someone happier is non linear, so maximizing total wealth is a poor way to measure the health of a society. Realistically Log(income) is probably a much better measure.
Granted, the economy is not a zero sum game. However, at a practical level simply accumulating wealth is often a zero or even negative sum game. EX: Spam, Pollution, etc.
Spam and pollution both impose negative externalities. Are you arguing that the primary mode by which people become wealthy is by generating externalities?
Also, Log(consumption) is a much better measure than Log(income) - a 1000 dollar bill doesn't make you happy, it's the hookers and cocaine you buy with it that does.
I do think most wealth accumulation causes both negative externalities and positive ones. But, my point was wealth accumulation is not inherently a virtue. Sure curing a disease or building the next Google is great, but you can also make a lot of money squatting domains etc. We often whitewash the rich but the sad truth of it is people are people and no large group is going to be limited to good or bad people.
Also, unspent wealth buys piece of mind which is can make you happy. AKA, I would much rather have 100,000$ in my bank account than 100$. Really log(income) still understates things as lifestyle changes more going from 20,000$ to 40,000$ income vs 20,000,000 income to 40,000,000 income.
PS: I think the amount of money entertainers can make is probably inherently detrimental to society. But, that's another debate entirely.
Democracy doesn't work with capital concentrated in a few hands - they can just buy the politicians and overtake the country, imposing laws which allow them to concentrate even more wealth and power. Arguably, that's something that's happening in the US already.
From a more practical perspective, concentrating wealth in the hands of a few people will cause inefficiencies. Rarely does a single person (or a small group of persons) have the best ideas on how to allocate resources. An important tenet of Capitalism is that fair competition breeds multiple solutions to the same problem. While it's inefficient because some aspects are duplicated or tangential (accounting/marketing), it is an excellent system for insuring the best players are providing products and services.
We should care about it in as much as it results in massive differences in basic quality-of-life for large numbers of people.
Quality-of-life here is not defined by the ability buy iThings, flat-screens, and XBoxes, but affording decent education, health care, and a fair chance at upward social and economic mobility, regardless of where you come from.
In spite of inequality increasing, relative mobility has remained the same and absolute mobility has increased. People consume more health care and education than ever before.
Mobility is far too complex a phenomenon to sum up with a single nationwide "rate". Here's an example that reflects on the role of race in metropolitan areas and commute zones on mobility:
The authors of the study you cite actually provided some input for that article.
Regarding education, the total "quantity" of education people are consuming seems like a meaningless metric. It says nothing about the distribution of high-quality educational opportunities to people on different ends of the income spectrum. The disparities in access to quality education in many cases are strongly correlated to the income distribution.
Inequality went up, so did life expectancy. So by your criteria, we should probably not worry about inequality. What health outcome do you believe has decreased, as a result of inequality increasing?
In general, poor populations have reduced access to high-quality care. While people with low incomes are more likely to be uninsured, income-related differences in quality of care that are independent of health insurance coverage have also been demonstrated (Brown, et al., 2003).
Also this metric has increased over the years:
People without a usual source of care who indicated a financial or insurance reason for not having a source of care.
You seem to be basing all your arguments on national averages. That data shows none of the variances in life expectancy depending on race, class, region, and income.
Other measures of the social ills correlated with being very poor? In cities, if you are also black or hispanic , a high chance of death by violence. A relatedly high rate of incarceration, often for nonviolent crimes. High rates of children in the foster system.
Just because the averages nationwide are slowly ticking up over time, does not mean that there are not significant populations slipping backwards.
If you believe that life expectancy in some particular group has gone down in a manner correlated with inequality, post data showing it.
In cities, if you are also black or hispanic , a high chance of death by violence.
Do you believe that if the 1% had less money, poor blacks/hispanics would be less likely to kill other poor blacks/hispanics? If not, this is irrelevant.
I haven't double checked this, but I strongly suspect that even as inequality has risen in the US, the rate of poor blacks being murdered has gone down. (Reason: poor blacks being murdered is a big chunk of the murder rate, and murders and other crime have generally gone down.)
Yeah, because the world was just PEACHY before WWI. People starving in the streets if not downright famines, oligarchs meddling in the affairs of the people... just awesome. History has proven time and time again that when enough people are sufficiently marginalized, they tend to disregard the property rights of the wealthy in order to restore some sort of equilibrium. It's a game of chicken that numerically the wealthy can't win.
> The post WW2 area had less income inequality because the world economy had been torn apart.
If that was true, then as the economy recovered, income inequality would have increased. But it didn't, it continued to decrease in the USA and UK until about 1980, when it started rising again.
I feel that it is unlikely to be a coincidence that the trend changed around the same time Thatcher and Reagan were elected.
> We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.
There was a vast net increase in wealth between 1914 and 1945.
Ah so "What we know about income inequaliy(sic)" is "routinisation" is to blame.
This is yet another sloppy, cut and paste job by Reuters of a single researcher's blog post based on his unpublished working paper. Not worth reading unless you have already read most of the academic research on the subject.
Assuming you have a basic education in economics and statistics I would dive into the academic research. Just keep in mind that like everyone else, academics have biases of various kinds (e.g. Thomas Piketty is pretty far left) and inequality is a very controversial and political issue. It is best to look to the data and get multiple interpretations. Unfortunately you can't rely on reporters who are even less informed and just as biased.
Lastly keep in mind nobody may know the answer to these important questions as the system is very complex and dynamic and the data we have is not very good.
Here's a variety of links to get started but you should dig into the references:
I can't really get my head around the fundamental premise in this research, which is that 'skill difficulty' is some sort of baked in thing. Many four year college graduates today have more mathematics than a professor of mathematics had 100 years ago. Did the 'math skill' go from 'high skill' to 'middle skill'?
Most of the things I've read is that people have the 'wrong' skills, so if you have the 'correct' skills you are in a minority, sought after and can demand higher wages, if you have the 'wrong' skills you are competing with everyone else for anything available, which runs the gamut from 'no skills' to 'easily acquired quickly' skills.
An interesting question for me is how people change their skill sets over time. I am familiar with engineers who 'stopped learning' and when the industry had moved past the technologies they were skilled in, they became unemployed and stayed that way until they developed new skills. And in that vein it would be interesting to know what is the rate of change in demanded skills vs their time to acquire. We take kids out of high school and turn them into software engineers with fours years of engineering curriculum (which could easily be done in 2 years if you skipped all the general Ed classes. 128 units of which 64 are in your major? Seems like a testable hypothesis.) There are jobs where you need a Ph.D (or MD, or JD) so that skill set is takes a bit more than 2 years to acquire (6 - 8 depending).
I don't see skills as this thing you get between the ages of 18 and 22 and the forever and ever after you either use them or die. So I can't really agree with the premise that 'middle skill' job loss means anything.
As much as I am happy that my profession pays well, it is unreasonable to think everyone has the ability to do what we do. Adapting to skills beyond your domain is really hard, especially when you are aging.
Here's a scenario. Let's say that US loses it's energy supply (due to any fictional reason you can imagine). Who do you think is going to be in demand? No, no no kids...it's not going to be us programmers. The demand will be for the physically abled. The guys who can lift and ship without breaking too much sweat.
Different environment, different demands. We are just plain lucky to be in the workforce today and to have an interest (and aptitude) in tech stuff.
For society to function, everyone needs to have a reasonable chance at having the ability to live.
> Different environment, different demands. We are just
> plain lucky to be in the workforce today and to have an
> interest (and aptitude) in tech stuff.
I think you just made my point, did you see it that way? The definition of "high skill" and "low skill" are dependent variables on the environment, not independent variables like this research treats them.
I also find this bit: "Adapting to skills beyond your domain is really hard, especially when you are aging." really interesting. It's the difference between "hard" and "possible." I get that its hard to go back into learning mode, especially to recapture that ability to treat every new thing as a gem to be admired. But I have not found any evidence that it isn't possible. And being hard is not in and of itself a reason not to do something. Especially if doing this 'hard' thing can greatly enhance your ability to be productive in the new environment.
In your fictional scenario, I would totally start working on blacksmithing. They seemed to be the 'hackers' of their day. And I'd expect it to take several years before anyone would seriously considering using my services for anything other than basic stuff. Hard? Yes, but unless I had some damage to my rotator cuff or something I would think it was possible.
> Yes, but unless I had some damage to my rotator cuff or something I would think it was possible.
It would be naive of us to think that we will 'surely" adapt to new skills. Circumstances can mean that you just don't have the ability to do such things anymore.
Is it "possible"? sure. But is it going to suck the life out of you? Most likely. Upgrading skills takes time, effort and resources. Most people (even in America) don't have enough of each of those.
Look at all these students with $200k debt. They've basically imprisoned themselves for a long time. Even a job that pays $100k (-35% tax -30% living expenses) does not cut it. Acquiring new skills with negative equity makes it harder for most people.
Just a couple of follow-ups. I see your points but history doesn't agree. People adapt or die, and sometimes adapt and die. Looking at it in the 'small' (which is on an individual anecdote level) vs looking at it in the 'large' which is on a population cohort level. When there are large industrial changes there are employment shifts. That displaces some workers, creates new opportunities which are filled by new workers. After one or two generations of stability the process flattens out.
> Look at all these students with $200k debt.
This gets thrown around a lot. But it is a red herring. You need to drill down to find students who paid $200K for a worthless education, yes there are some, are they a material subset of all students? No. Look at all the people who were put into mortgages they couldn't afford because the rules were changed to incentivize that. That about pulled down the global financial system (we're still not quite done with that mistake). There is certainly a social justice issue with student debt, providing loans to students to get degrees that are unmarketable. But the 'fix' is to get rid of the debt discharge protection that student loans currently have. Allow the students to declare bankruptcy and dump the obligation, and guess what nobody will loan students $200K to get a fine arts degree. Is that a problem ? I don't know. For schools? Yes, they are already figuring out that they can't sell a diploma for an arbitrary price any more.
The question is whether the college graduates know more than professors a century ago, not whether the study of mathematics has produced more knowledge.
No great stagnation in Bay Area and other innovation capitals of the world. Facebook (FB) keeps making new highs. Now is a great time to be an economist, coder, real estate investor, self-actualizer, speculator, etc. Not so great if you graduated in a non stem major with mountains of debt.
Josh Brown debunks this 1929 comparison chart http://www.thereformedbroker.com/2014/02/13/the-chart-that-w...
Stocks will keep going up along with Bay Area real estate prices (especially Palo Alto and Athlerton.
Nerds are the ones making all the money in this new era while being showered with accolades by the media for the innovations they bring to society.
>First, the number of well-paid middle-skill jobs in manufacturing and clerical occupations has decreased substantially since the mid-1980s.
in all these articles/analysis replace the middle-skill jobs in manufacturing with the programming/IT jobs - the middle-skill jobs of today - and you'd hardly find any decline
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Easily 80% of managers I've met/worked for have been decidedly low skill. Especially when compared with engineers, research scientists, programmers, designers, etc
Good management requires a vast amount of skill, whether that's technical or soft skills. Good managers keep you doing your work, and reduce your distractions without you even noticing.
Your statement should read, "Easily 80% of the managers I've met/worked for have been BAD". See the difference?
Fair enough on the rewording but I'd hardly call management high-skill labor akin to the examples I mentioned.
I probably shouldn't say its a low-skill or brainless job (in general... though I do often get that feeling from mangers), but I just personally never put it in the class of highly-skilled jobs.
Edit: I guess that I've always just placed it as more of a 'ladder climber' type of job than a highly skilled worker type of job. But to be totally fair that is likely due to my experiences. :)
Source: former software engineer turned manager. Never had to juggle so many wildly different skills in my life.
I agree with 80% being shit though. That was my motivation to go there in the first place.
The thing is, just like CS doesn't teach people to be good developers, no amount of management training teaches people to be good managers.
Also, a good percentage of the coders are pretty shit too. The networking possibilities of the internet have allowed us to isolate ourselves from that, so good developers are usually amongst themselves, be it on places like HN, or working for companies they already know have high standards.
I bet outside of out bubble, the 80% shit applies to many other professions, including our own.
The post WW2 area had less income inequality because the world economy had been torn apart.
We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.
But that angry failed artist came to power by blaming the disastrous economic conditions on a) the victorious powers of WWI for imposing crippling penalties upon Germany, b) the existing government and their predecessors for accepting and adhering to these conditions, and c) certain groups within Germany for "exploiting" the situation.
Regarding the difference between pre-WWI and Post-WWII income inequality it seems pretty disingenuous to claim (if you were) that the times (then and now) are similar in economic terms, not to mention quality of life. Between the 50s and 80s or so there was still great growth (for Americans at least) but much less income inequality. Some may argue that constituted a 'sweet spot' in terms of balancing growth with income inequality.
There is some interesting information at the below link regarding the time period following WWII
http://www.cbpp.org/cms/?fa=view&id=3629
To boil down a lot of interesting reading (on a subject, which it is fair to say, generates a lot of controversy): income inequality produces social instability, primarily as a result of a lot of economically (and, by extension, sexually) disenfranchised young men.
I'm not touching the sexual part with a 10 foot pole cause it bears no relevance in my opinion either. But I do think that many young men are economically disenfranchised in The States.
Edit: In my comment any mention of 'men' should read "and women". I don't mean just males which is another reason I don't think it is important to address the sexual disenfranchisement part.
A quick google search suggests black men are less sexually disenfranchized than non-blacks.
http://www.thedailybeast.com/articles/2010/07/20/sex-statist...
http://www.nbcnews.com/id/19374216/#.Uv0a2HX_SFk
It also isn't necessarily true that the change in the level of disenfranchisement is due to growth, or change in anything having to do with the economy, so much as due to changes brought on by the civil rights movements. Things can change on a societal level without being impacted by or impacting directly things at an economic level.
The social instability mentioned in the parent is still going on even with these advances. Just saying 'its better than it was' doesn't make it not a thing.
We are. That's a centerpiece to modern intersectional feminism: everyone's hurt to some degree by the structure of society. Men have it better in a lot of situations, but things are still rough.
Who is driving the Tea Party? I would contend economically disenfranchised (though, granted, not particularly young in a lot of cases) voters reacting to increasing economic polarization.
Do Tea Party rank-and-file see their grievances in those terms? Not when they're talking about guns rights and Obamacare perhaps. But get them talking about Wall Street and bank bailouts and it's a different story.
http://en.wikipedia.org/wiki/Ku_Klux_Klan#Contemporary_Klan:...
Regarding the debt ceiling, congress cannot threaten or cause default, since the executive branch has the power to prioritize debt payments. In any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
The parent didn't say that instability had increased, rather economic polarization had, but by what metric are you implying instability has decreased considering your above examples?
Klenwell said inequality is bad because it causes instability. That doesn't seem to be happening, so his theory seems to be wrong.
And to quote your prior post:
in any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
So by your example, things that happened in 1995 are 'more of the same' but when presented with a counter example in the same time span (and even more recently) it shows that things have changed (reduced instability) because it has been a significant period of time? Check. That makes sense.
I'm checking out of this conversation. The contortions in your logic are just a bit too much for me. Carry on.
And this does not alarm you?
We destroyed wealth because of the world wars, which then caused "rising equality".
I do not believe the world wars happened due to inequality - so no, I'm not worried.
Regardless of how the Reich was built, or oriented politically, economic inequality (and nationalism) were a primary tool used to gain momentum.
You are totally correct that German leaders of business and holders of wealth were courted into the Reich. Many of them from Bayer to IG Farben benefited directly from the concentration camps.
If the economic suppression of Germany by the rest of Europe and the Great Depression hadn't happened (global income inequality, after a fashion), would WW2 have happened?
Do you not believe the earth is more than 4,000 years old and that we evolved from other forms of life eons ago as well?
Some things are already established as fact; not everything is an opinion, not all opinions are valid, and the ones you've stated are just flat-out contradictory with actual real data.
The amount of resources it takes to make someone happier is non linear, so maximizing total wealth is a poor way to measure the health of a society. Realistically Log(income) is probably a much better measure.
Granted, the economy is not a zero sum game. However, at a practical level simply accumulating wealth is often a zero or even negative sum game. EX: Spam, Pollution, etc.
Also, Log(consumption) is a much better measure than Log(income) - a 1000 dollar bill doesn't make you happy, it's the hookers and cocaine you buy with it that does.
Also, unspent wealth buys piece of mind which is can make you happy. AKA, I would much rather have 100,000$ in my bank account than 100$. Really log(income) still understates things as lifestyle changes more going from 20,000$ to 40,000$ income vs 20,000,000 income to 40,000,000 income.
PS: I think the amount of money entertainers can make is probably inherently detrimental to society. But, that's another debate entirely.
(Of course you are driving at something else, but the way you have phrased it completely ignores this little piece of reality)
Quality-of-life here is not defined by the ability buy iThings, flat-screens, and XBoxes, but affording decent education, health care, and a fair chance at upward social and economic mobility, regardless of where you come from.
http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
Does this mean inequality is not a problem?
http://economix.blogs.nytimes.com/2013/07/25/the-complex-sto...
The authors of the study you cite actually provided some input for that article.
Regarding education, the total "quantity" of education people are consuming seems like a meaningless metric. It says nothing about the distribution of high-quality educational opportunities to people on different ends of the income spectrum. The disparities in access to quality education in many cases are strongly correlated to the income distribution.
Measuring health outcomes is similarly more complex than the broad brush of "total health consumed" that you paint it with: http://www.nber.org/reporter/spring03/health.html http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/
https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...
What data (if any) would be sufficient to convince you that inequality is not a problem?
In general, poor populations have reduced access to high-quality care. While people with low incomes are more likely to be uninsured, income-related differences in quality of care that are independent of health insurance coverage have also been demonstrated (Brown, et al., 2003).
Also this metric has increased over the years:
People without a usual source of care who indicated a financial or insurance reason for not having a source of care.
What data (if any) would convince you that inequality is not a problem?
Other measures of the social ills correlated with being very poor? In cities, if you are also black or hispanic , a high chance of death by violence. A relatedly high rate of incarceration, often for nonviolent crimes. High rates of children in the foster system.
Just because the averages nationwide are slowly ticking up over time, does not mean that there are not significant populations slipping backwards.
In cities, if you are also black or hispanic , a high chance of death by violence.
Do you believe that if the 1% had less money, poor blacks/hispanics would be less likely to kill other poor blacks/hispanics? If not, this is irrelevant.
I haven't double checked this, but I strongly suspect that even as inequality has risen in the US, the rate of poor blacks being murdered has gone down. (Reason: poor blacks being murdered is a big chunk of the murder rate, and murders and other crime have generally gone down.)
It's up to you what you care about. Some people find the arguments in https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equ... persuasive.
> The post WW2 area had less income inequality because the world economy had been torn apart.
If that was true, then as the economy recovered, income inequality would have increased. But it didn't, it continued to decrease in the USA and UK until about 1980, when it started rising again.
I feel that it is unlikely to be a coincidence that the trend changed around the same time Thatcher and Reagan were elected.
> We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.
There was a vast net increase in wealth between 1914 and 1945.
Too much poverty and everyone looses.
This is yet another sloppy, cut and paste job by Reuters of a single researcher's blog post based on his unpublished working paper. Not worth reading unless you have already read most of the academic research on the subject.
Lastly keep in mind nobody may know the answer to these important questions as the system is very complex and dynamic and the data we have is not very good.
Here's a variety of links to get started but you should dig into the references:
http://economics-exposed.com/how-arec/
https://en.wikipedia.org/wiki/Economic_inequality
http://www.equality-of-opportunity.org/
http://ntj.tax.org/wwtax/ntjrec.nsf/009a9a91c225e83d852567ed...
Most of the things I've read is that people have the 'wrong' skills, so if you have the 'correct' skills you are in a minority, sought after and can demand higher wages, if you have the 'wrong' skills you are competing with everyone else for anything available, which runs the gamut from 'no skills' to 'easily acquired quickly' skills.
An interesting question for me is how people change their skill sets over time. I am familiar with engineers who 'stopped learning' and when the industry had moved past the technologies they were skilled in, they became unemployed and stayed that way until they developed new skills. And in that vein it would be interesting to know what is the rate of change in demanded skills vs their time to acquire. We take kids out of high school and turn them into software engineers with fours years of engineering curriculum (which could easily be done in 2 years if you skipped all the general Ed classes. 128 units of which 64 are in your major? Seems like a testable hypothesis.) There are jobs where you need a Ph.D (or MD, or JD) so that skill set is takes a bit more than 2 years to acquire (6 - 8 depending).
I don't see skills as this thing you get between the ages of 18 and 22 and the forever and ever after you either use them or die. So I can't really agree with the premise that 'middle skill' job loss means anything.
Here's a scenario. Let's say that US loses it's energy supply (due to any fictional reason you can imagine). Who do you think is going to be in demand? No, no no kids...it's not going to be us programmers. The demand will be for the physically abled. The guys who can lift and ship without breaking too much sweat.
Different environment, different demands. We are just plain lucky to be in the workforce today and to have an interest (and aptitude) in tech stuff.
For society to function, everyone needs to have a reasonable chance at having the ability to live.
I also find this bit: "Adapting to skills beyond your domain is really hard, especially when you are aging." really interesting. It's the difference between "hard" and "possible." I get that its hard to go back into learning mode, especially to recapture that ability to treat every new thing as a gem to be admired. But I have not found any evidence that it isn't possible. And being hard is not in and of itself a reason not to do something. Especially if doing this 'hard' thing can greatly enhance your ability to be productive in the new environment.
In your fictional scenario, I would totally start working on blacksmithing. They seemed to be the 'hackers' of their day. And I'd expect it to take several years before anyone would seriously considering using my services for anything other than basic stuff. Hard? Yes, but unless I had some damage to my rotator cuff or something I would think it was possible.
It would be naive of us to think that we will 'surely" adapt to new skills. Circumstances can mean that you just don't have the ability to do such things anymore.
Is it "possible"? sure. But is it going to suck the life out of you? Most likely. Upgrading skills takes time, effort and resources. Most people (even in America) don't have enough of each of those.
Look at all these students with $200k debt. They've basically imprisoned themselves for a long time. Even a job that pays $100k (-35% tax -30% living expenses) does not cut it. Acquiring new skills with negative equity makes it harder for most people.
Is this actually true? Have there been many major advancements in math in the past 100 years?
Stocks will keep going up along with Bay Area real estate prices (especially Palo Alto and Athlerton.
Nerds are the ones making all the money in this new era while being showered with accolades by the media for the innovations they bring to society.
in all these articles/analysis replace the middle-skill jobs in manufacturing with the programming/IT jobs - the middle-skill jobs of today - and you'd hardly find any decline